AAR: Energy sector weighing heavily on U.S. rail traffic

Total U.S. rail traffic for the first seven months of 2015 was 16,243,896 carloads and intermodal units, a dip of 1 percent from the same point in 2014, the Association of American Railroads (AAR) reported yesterday.

For the year through July, U.S. railroads logged 8,306,979 carloads, a drop of 4.2 percent compared with a year ago. U.S. intermodal traffic for the period was another story, however, as railroads posted 7,936,917 containers and trailers, a 2.5 percent increase.

"Railroads are overexposed, relative to the economy in general, to the energy sector. Put another way, changes in the energy sector are having a bigger effect on rail traffic than they are on the economy as a whole," said AAR Senior Vice President Policy and Economics John Gray in a statement. "For that reason, we don't think declines in overall rail carloads in recent months are necessarily reflective of fundamental weakness in the broader economy."

During the month of July, U.S. carload traffic totaled 1,376,411 carloads, down 6.5 percent compared with July 2014. U.S. railroads also originated 1,331,888 containers and trailers in July 2015, up 3.5 percent or 45,538 units from the same month last year. For July 2015, combined U.S. carload and intermodal originations were 2,708,299, down 1.8 percent or 49,757 carloads and intermodal units from July 2014.

Excluding coal, carloads were down 2.8 percent for July 2015 compared with a year ago.

For the week ending Aug. 1, U.S. railroads’ total traffic was 559,125 carloads and intermodal units, down 2.7 percent compared with the same week in 2014.

Canadian railroads’ cumulative traffic volume for the week was 76,831 carloads, down 5.2 percent, and 60,582 intermodal units, down 0.1 percent compared with the same week in 2014. For the first 30 weeks of 2015, Canadian railroads reported cumulative rail traffic volume of 4,148,118 carloads, containers and trailers, up 1.6 percent.

Mexican railroads logged 17,276 carloads for the week, down 0.6 percent compared with the same week last year, and 10,893 intermodal units, down 6.9 percent. Cumulative volume on Mexican railroads for the first 30 weeks of 2015 was 808,779 carloads and intermodal containers and trailers, up 2.2 percent from the same point last year.